WASHINGTON — The government is likely to lose more than $1 billion in airline ticket taxes because lawmakers have left town for a month without resolving a partisan standoff over a bill to end the partial shutdown of the Federal Aviation Administration.
The government already has lost more than $200 million since airlines are unable to collect taxes on ticket sales because the FAA’s operating authority has expired.
The Senate recessed Tuesday until September, erasing any possibility for quickly resolving the issue. The House left Monday night.
Caught up in the partisan acrimony are nearly 4,000 FAA employees who have been furloughed. The FAA also has issued stop-work orders on more than 200 construction projects, threatening the jobs of thousands of other workers. Air traffic controllers, however, remain on the job.
The debacle could have had an upside for airline passengers because ticket taxes, which typically average about $30 on a $300 round-trip fare, are suspended during the shutdown. But airlines decided to pocket the windfall. Within hours of the shutdown on July 23, most airlines raised their fares by amounts equivalent to the taxes that disappeared.
Some passengers will be due tax refunds if they bought their tickets and paid taxes before the shutdown but their travel took place during the time airlines no longer had authority to collect the money. Airlines and the Internal Revenue Service are quarreling over who will handle the complicated and expensive process of getting those refunds to passengers.
A sticking point with some Democrats is proposed cuts in air-service subsidies to 13 rural communities.
Underlying the subsidy dispute is a broader, more politically charged dispute over a labor provision inserted by House Republicans into a separate, long-term FAA funding bill. The provision would overturn a National Mediation Board rule approved last year that allows airline and railroad employees to form a union by a simple majority of those voting. Under the old rule, workers who didn’t vote were treated as “no” votes.
In Colorado, the failure to pass a funding extension means FAA officials will be unable to disburse about $13.2 million in grant money to Colorado airports.
A project scheduled to receive about half the FAA grant money is a runway rehabilitation at Denver International Airport. A DIA spokesman said the $25 million project — of which $6 million is FAA money — will go ahead in mid-August no matter what happens. In addition, 27 FAA employees in Colorado will face furloughs.
Due to the stoppage, the Colorado Springs Airport has pushed back a $9.6 million taxiway rehabilitation project to next year. Aviation director Mark Earle said the delay means an increase in maintenance costs and no work for construction workers
Also affected is a runway rebuild at the Fort Collins-Loveland airport that will also increase maintenance costs.
